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Kraken’s court filing stated, “The SEC does not have the authority to regulate all speculative investments. Instead, the Exchange Act limits the SEC’s jurisdiction to transactions in securities, which the statute defines to include investment contracts.”
Crypto exchange Kraken has made a strategic legal move to counter the claims brought against it by the US Securities and Exchange Commission (SEC).
Earlier, in November 2023, the SEC filed a lawsuit against the exchange, alleging Kraken operated an unregistered platform. Subsequently, the SEC filed another court filing, stating that the agency’s measures align with its role in overseeing securities intermediaries. The SEC stressed that its application of the Howey test is consistent with its statutory obligations.
Last night, @krakenfx fired back at the SEC with its final brief in the motion to dismiss the SEC’s complaint.
— Marco Santori (@msantoriESQ) May 10, 2024
The SEC had its opportunity to tell the Court what, precisely, is the investment contract that supposedly trades on Kraken.
But they couldn't. 1/🧵
In response, Kraken argued that cryptocurrencies listed in the SEC's complaint should be treated differently, akin to commodities rather than securities. Kraken's latest filing to the SEC's opposition focused on interpreting the SEC's jurisdiction under the Howey test.
Kraken's legal team also contended that the SEC's broad interpretation would grant the agency unprecedented authority over investment activities not explicitly delegated to it by Congress. The exchange also argued that any significant changes to the financial regulatory landscape should be debated in Congress rather than through legal proceedings.